States with the heaviest oil and gas
development in the shale drilling boom are doing a poor job enforcing rules
meant to protect public health and safety, according to a new analysis by
Earthworks.

The 124-page analysis — “Breaking all
the rules: the crises in oil and gas regulatory enforcement” — was partially
paid for with a $25,000 grant from The Heinz Endowments. The foundation has
given grants to a number of projects related to the shale boom recently, said
Jennifer Krill, executive director of Earthworks.

In preparing the report, Earthworks
interviewed enforcement experts and analyzed a year’s worth of data from
agencies in Colorado, New Mexico, New York, Ohio, Pennsylvania and Texas. The
organization also created state-specific reports for some of them, including
Texas.

About 350,000 active oil and gas wells
go uninspected each year in those states, according to Bruce Baizel, attorney
for Earthworks.

The Texas Railroad Commission enforces
most of the environmental rules for the oil and gas industry in Texas. The
railroad commission is charged with making the most of the state’s oil and gas
resources and, at the same time, with protecting public safety and the
environment. Compared to other states, Texas inspectors recorded more
violations per inspection. Texas inspectors documented between 70,000 and
90,000 violations per year between 2006 and 2010, or about 0.6 violations per
inspection, Earthworks found. The group also found that Texas’ enforcement
process doesn’t deter repeat violators and may be to blame for the large number
of violations.

Unlike many states, however, Texas
inspectors have severance powers — the authority to shut in a well.

As a result, “the commission finds that
most operators will bring their operations into compliance,” said spokeswoman
Ramona Nye in an e-mail. “For those operators who did not bring their leases
into compliance with commission rules, the commission assessed $1,965,019
million in enforcement penalties in FY 2012.”

Earthworks found that in the first three
quarters of this fiscal year, Texas violators, on average, paid just more than
$1,000 per violation.

Overall, state agencies showed evidence
of being unprepared for the boom, Baizel said. The shortfalls in inspection and
enforcement undermine public trust in the ability of state agencies to enforce
the law.

Dan Boggs, an affected landowner in
Gardendale, and the former mayor of Dish, Calvin Tillman, were included in a
media call about the reports. Both said the reports echoed the first-hand
experiences they had with poor enforcement in their communities.

“Those of us who reached out to state
agencies for help, this confirmed what we experienced,” Tillman said, adding
that enforcement programs are often “the first to get cut in a budget crisis.”

Much of Earthworks’ report on Texas
echoed problems detailed by the state’s Sunset Advisory Commission last year
when it recommended major reforms for the Texas Railroad Commission. The Texas
Legislature was not able to address those reforms in 2011. The matter was
pushed to the next session in 2013.

The railroad commission is again under
review, Nye said, but the new report is not yet complete.

Since the 2011 report, the railroad
commission has hired 13 new inspectors, for a total of 153, Nye said.

To lower the number of violations in
Texas and other states, Earthworks made many recommendations based on
interviews with stakeholders and experts in enforcement. Some of those
recommendations include measures to increase citizen empowerment by giving
residents the ability to document violations, the ability to complain without
fear of intimidation or reprisal, the ability to track violations and the ability
to sue.

The Colorado Oil and Gas Commission
agreed through a memorandum of understanding to share its authority with local
inspectors in Gunnison County — an enforcement trend Baizel said could help
other heavily impacted areas in other states.

The Texas Railroad Commission is working
with the Texas Department of Public Safety to make sure waste haulers are in
compliance, protecting roads statewide and in heavily impacted areas, such as
the Eagle Ford Shale and Permian Basin, from pollution, Nye said.

Earthworks’ report is the second report
for Texas by an environmental group this month examining the impact of the
drilling boom on communities.

Environment Texas released a report last
week on economic impacts. Luke Metzger said his group was using the report
first as part of public comment to the railroad commission on new rules for
water use, which could include some requirements for recycling.

Environment Texas found that state water
planners have called for $400 million in new water projects to supply mining,
40 percent of which would be used for hydraulic fracturing.

The report will become part of his
group’s push to shore up not only rules for water usage but also for financial
responsibility in plugging old wells in the next legislative session, Metzger
said.

One recommendation from the 2011 sunset
report — self-funding the Texas Railroad Commission — remains a priority in an
upcoming session for Rep. Myra Crownover, R-Corinth.

“The oil and gas industry in Texas is
booming and it is vital that we have an effective, efficient and adequately
funded Railroad Commission,” Crownover wrote in an e-mail.

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